No, it is not about inequality and that was brilliantly proven by the USSR. What it is about is equal access to community credit. This continues to be jealously guarded by the aristocrats of money rather than shared and all rationalized around a dogma of fear.
Side step that issue and poverty itself will simply disappear and the rich will still get richer as if it really mattered. What matters is having the bottom third of society to be steadily improving and naturally rising. We could even write our tax code along those lines. Have the bottom third only pay consumption taxes, the middle third pay an additional income tax and the top third pay as much as well as an equal amount in socially beneficial capital investments to put their name on.
At least it may make people happier to pay taxes.
My real point is that we will solve all poverty bottom up and never top down.
The other half
To end inequality, we
must realise that it isn’t about the rich, it’s about the poor.
And we know almost nothing about them
by Claire
Melamed
http://aeon.co/magazine/society/to-end-inequality-we-must-understand-how-poverty-works/
Close observers
of the development scene will have noticed an interesting shift over
the past few years. Where once institutions such as the World Bank
and charities like Oxfam described their goal as simply ‘ending
poverty’, today they tend to frame things in terms of poverty and
inequality. Well, that makes sense: doesn’t it seem intuitively
obvious that these two things must be connected in some way?
Yet those links can be
surprisingly hard to bring into focus. In 15 years of working in the
development sector – first for international NGOs and more recently
running a research programme on poverty and inequality – I have
found myself explaining over and over again exactly what the one has
to do with the other. What does it matter to an impoverished farmer
in South Sudan if 85 people hold as much wealth as half the world’s
population? If those 85 people gave everything away, would that
actually help the farmer?
The problem, I have
come to think, is that there are two very different ways of thinking
about inequality. The first is all about the rich. The second is all
about the poor. The first is the one we usually hear about. The
second is the one that really matters.
The first, of course,
is the one that preoccupies most writers and commentators on the
question. The dominant metaphor seems to be a sort of global seesaw,
with a few hugely rich individuals weighing down one end and the rest
of us clinging for dear life to the other. As Thomas Piketty’s
Capital in the 21st Century (2014) demonstrates, the rich have been
getting richer much faster than the rest of us, so the seesaw is
getting ever more skewed. And so inequality is big news right now.
Two things, in particular, are remarkable about the current debate.
The first is how many people are having it – not just the usual
suspects, but lesser-known lefty agitators including the Pope,
President Barack Obama, the managing director of the International
Monetary Fund (IMF) and the head of the Bank of England. One would
think that a robust response was inevitable.
But perhaps not,
because the second remarkable thing is the dearth of actual policy
ideas. Piketty’s imagined tax on capital is probably the only part
of his book that has not met with near-universal acclaim. Mark Carney
of the Bank of England and Christine Lagarde of the IMF talk vaguely
about curbing pay and making tax ‘more progressive without being
excessive’ (whatever that means), but governments do not seem to be
rallying to that call. We are left to pore over cultural artefacts
such as the Financial Times’s ‘How to Spend It’ supplement –
a publication that might as well be a Trojan Horse operation designed
to fan the flames of class warfare. Here we glimpse a world where a
special supplement on luxury yachts is a viable commercial
proposition, where one might spend £6,000 on a dress because it
looked good on the model, and where private jets are simply a
practical transport solution. Few people live here, but it’s a very
recognisable address.
As a matter of fact,
the runaway incomes of the super-rich do have a link to poverty.
Where inequality is high and governments are pressured to reduce
taxes on the rich, government income goes down and there’s less
money for the kind of public spending that reduces poverty. Such
considerations lead naturally to the common proposition that we might
sort things out by taking money from the rich. We could cut down on
tax avoidance, for example, or limit pay, or tax capital. Would that
work? Well, it might. Then again, it might not. If governments make
very rich people a bit poorer by changing tax or inheritance rules,
who’s to say the money won’t just be spent on missiles or
grandiose infrastructure projects or other things that people don’t
really want, and which certainly won’t help to tackle extreme
poverty? This is a story that leaves many questions unanswered. To
start filling in the blanks, we need to look, not at the top of the
wealth distribution, but at the bottom; not at the inequalities that
make people rich, but the ones that keep people poor.
Look at that seesaw
again. It’s tempting to picture the people on it as atomised
individuals, randomly distributed between the two sides. But in fact
they aren’t like that at all. People don’t end up among the very
rich, or languish on the side of the very poor, by chance. Rather,
their position depends to a remarkable degree on the groups that they
belong to. Where do they live? What is their ethnic group or
religion? Do they have a mental illness or a physical disability?
What family do they come from?
Take education.
Between 1999 and 2011, the number of children in the world who were
not in school fell by around half. Good news. But who are the half
who didn’t benefit from this general improvement – the children
on the wrong side of the education seesaw? The data on this is not as
good as it should be (of which more later). But it’s likely,
globally, that around two-thirds of children lacking education are
from an ethnic minority in their own country. That’s useful
information. The deck appears to be stacked against certain people in
very predictable ways.
The inequalities
underlying patterns of poverty and exclusion are always complicated.
In Burkina Faso, for example, just under a third of children complete
primary school. Trying to understand the barriers faced by the
two-thirds who don’t attend school involves sifting through a lot
of data. Sexism is clearly part of the story: 34 per cent of
boys complete school compared with only 24 per cent of girls.
But in this case the biggest inequalities are not based on gender.
Much more striking is
the fact that 53 per cent of children in the central region of
Burkina Faso finish primary school compared with 8 per cent of
children in the most remote Sahel region; that’s a gap of 45 per
cent. And the worst-off are from the minority Tuareg ethnic group,
where only 3 per cent finish primary school. If governments want
to improve education and get all children into school, they have to
understand the pattern of inequalities that underlie the national
figures. Otherwise, they can’t make effective use of resources,
public education campaigns, political attention or anything else.
Where governments do
want to tackle inequalities, doing so on the basis of groups can have
impressive results. Take Bolivia, one of the most unequal nations on
Earth. The government of Evo Morales came to power in 2005 on the
basis of a programme to tackle the quite staggering levels of
inequality in the country. In Bolivia, inequality has a racial face:
indigenous people have a poverty rate approximately double that of
the white population.
Morales made an
explicit commitment to tackle the ethnic dimensions of inequality and
poverty. The government started a cash-transfer programme. It made
road-building a priority in order to link up the remote areas where
indigenous people live. It has started programmes to persuade
indigenous populations to attend university, and to encourage greater
linguistic diversity within the government machinery. These measures
seem to be working: inequality in Bolivia, while still high, has
started to decline, and extreme poverty is on a steep decline as
well. The Gini coefficient, the standard measure of income
inequality, fell by 15 per cent in Bolivia between 2001 and
2011.
Governments tend to
look after their own, namely the groups close to the top of the
wealth distribution
What matters is the
combination of policies. Unless ethnic disadvantage is tackled
explicitly, attempts to reduce poverty can fail. In Vietnam, for
example, the expansion of infrastructure to rural and remote areas
often had the effect of widening inequalities within those areas, as
the majority Kinh households were better able to take advantage of
the new opportunities offered by roads or irrigation, while
minorities found themselves falling further behind. Simply taxing and
spending wasn’t enough. More specific policies were needed.
So that’s the first
major benefit of this bottom-up perspective on inequality: it is very
practical. If we ask which groups are getting left behind, we
suddenly find ourselves with an agenda for effective action against
poverty. A second benefit also becomes clear: once we know which
groups are impoverished and excluded, we can often get a better sense
of the political context that explains both action and inaction.
Ethnic minority groups such as the Tuareg in Burkina Faso usually
have little power and influence. Governments tend to look after their
own, namely the groups close to the top of the wealth distribution.
It is common to find that disadvantaged groups are actively excluded
from power, in the name of prejudice, political expediency or some
long-held grievance – the reasons vary. Once we understand what’s
going on in each particular situation, we can try to change it.
That’s the upside.
But this kind of analysis presents risks as well as rewards. Appeals
to ethnicity or other group markers can be divisive, if not
dangerous. Most of the wars in the world today take the form of
clashes between ethnic or religious groups, and organisations that
focus on such group characteristics very often turn out to be intent
on violence. When we enter this territory, we have to tread
carefully.
All the same, the
Bolivian story should persuade us that the risk is worth running. In
Bolivia it was an appeal to the most excluded groups that gave
Morales his electoral victory and, with it, the power to tackle the
problem. In Ethiopia in the early 1990s, the nation-building project
that followed the civil war included a deliberate programme of
education investment among excluded groups. Again, the reduction of
group-based inequalities was a key part of the new government’s
strategy for holding on to power. A clear view of the obstacles that
trap the bottom end of the wealth distribution can deliver the
political conditions for action, as well as the insight to show what
that action should be.
Here, though, we hit a
further problem. There is a pitiful lack of information about the key
group-based inequalities that underlie poverty. International
household survey programmes offer patchy and partial data on
ethnicity – one important source of inequality, as the examples
above demonstrate. But it is incredibly poor information; just enough
to make some general points, but not enough, in most countries, to
track changes over time, or to drill down into the combinations of
ethnicity, geography and gender, for example, that are likely to act
together in important ways to keep people poor.
We know a little more
about education, and the fact that we do is thanks almost entirely to
the team behind the Education For All global monitoring report, which
maintains a database recording inequalities in that sector. A lot
less is known about the causes of other key dimensions of poverty. We
don’t have the same comprehensive database about health, for
example, or income, or vulnerability to crime and violence. Even less
is known about the factors that determine access to services that
help people to change their situations: finance, transport,
electricity, telecommunications. For many aspects of inequality, the
information simply isn’t there, even for the most well-meaning
governments.
the absurdities of
boardroom pay and tax avoidance might prick our sense of fairness,
but this has only a limited amount to offer the analysis of extreme
poverty
What information there
is tends to focus on a small number of inequalities, such as
ethnicity or geography. These are highly important, but they can’t
be the whole story. In most countries, to pick an especially glaring
example, we know nothing at all about the number of children out of
school who are physically disabled, or about rates of extreme poverty
among the mentally ill, despite anecdotal evidence suggesting that
such factors have a huge amount to do with discrimination and
exclusion.
So let’s look again
at our two inequality stories. The mainstream narrative – about the
runaway incomes of the richest people in the richest countries, the
absurdities of boardroom pay and tax avoidance and so on – might
prick our sense of fairness, but it has only a limited amount to
offer the analysis and treatment of extreme poverty. The second,
lesser known, inequality story is about the things that keep people
poor. This story offers fertile ground for the coalitions and policy
agendas that can actually address both poverty and inequality.
These stories are, of
course, linked. Concentrations of income and opportunity at the very
top might well make progress at the very bottom harder, in some cases
– for political, economic or social reasons. And more money,
generated by taxing the super-rich, would give more options to those
governments that do want to act.
But at present too
much analysis and attention in the development sector is given to the
first story. This has led to a situation where people want to believe
that inequality is important, but they don’t quite know why.
Answering that question requires us to grapple with the second type
of inequality. And that, in turn, requires better information. At
present, the empirical foundations of our inequality debates are far
too weak. Perhaps that is the most basic inequality of all: between
those of us who are counted, and those of us who are not.
No comments:
Post a Comment